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Building capacity to help Africa trade better

tralac’s Daily News Selection

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tralac’s Daily News Selection

tralac’s Daily News Selection

The selection: Wednesday, 4 May 2016

Mo Ibrahim: Could regional integration make Africa the next big economic success story? (WEF)

It won’t be long before Africa’s rapidly expanding population bypasses China’s. We are now little more than 100 million people behind. With a young, energetic and increasingly well-educated workforce, it should provide a powerful motor for our continent to emulate China’s stellar performance. There may be concerns – not least in Africa – about China’s economic slowdown. But while its increase in GDP in 2015 may have been the lowest for a generation, it was still 6.9%. It means its growth was the equivalent of adding on the entire economy of Switzerland or Saudi Arabia. Of course, China remains the success story of the last 30 years. But just imagine how different the picture might have been if China was divided into 54 states, each with its own customs rules, its own currency and national infrastructure that rarely linked with its neighbours. Does anyone seriously believe that a China saddled with such divisions could have grown so quickly into the world’s biggest economy? [World Economic Forum on Africa: 11-13 May, Kigali]

CFTA expert group meeting: update (UNECA)

The meeting this week [in Nairobi] will focus on nine issues that can be feasibly achieved or agreed upon ahead of the October 2017 deadline. These are: trade in goods, trade in services, special African agreement on agriculture, fisheries, industrial pillar, common investment area, trade facilitation and customs cooperation, trade remedies and competition policy and institutional arrangements for implementation. The outcome of the meeting is expected to provide substantial input to the CFTA negotiation process. [COMESA's Yellow Card scheme: East African insurers, transporters renew efforts to boost usage]

EDBI conference: Ease investment terms to lure foreign firms, Kenya tells African nations (Daily Nation)

Kenya on Tuesday urged African governments to set up independent investment portals to enhance interaction with foreigners seeking to launch operations within their countries. Kenya Investment Authority Managing Director, Dr Moses Ikiara, said its e-regulations platform received 20,600 enquiries from potential investors drawn from 100 countries. Dr Ikiara told an international conference on Ease of Doing Business Initiative at Safari Park Hotel in Nairobi yesterday that going digital would further deepen interaction with investors leading to meaningful dialogue as compared to a one-stop-shop for all State services.

DG Azevêdo calls for action to provide trade finance for small businesses (WTO)

In a new WTO publication, 'Trade finance and SMEs: bridging the gaps in provision', which examines the problem and looks into possible solutions, DG Azevêdo says that easing the supply of credit could have a big impact in helping small businesses grow and in supporting the development of the poorest countries. The estimated value of unmet demand for trade finance in Africa is $120bn (one-third of the continent’s trade finance market) and $700bn in developing Asia. Bridging these gaps would unlock the trading potential of many thousands of individuals and small businesses around the world.

UBA looks to Africa for growth (ThisDay)

In furtherance of its strategic vision to grow its revenue and franchise across the African continent, the United Bank for Africa Group has announced plans to extend its banking operations to 25 countries on the continent. Currently, UBA subsidiaries operate in 18 African countries, which at the end of the first quarter of 2016, contributed up to 28% of the group’s operating revenue. UBA Group Chairman, Mr. Tony Elumelu, disclosed this on Tuesday in an interactive session with journalists. Chairman of UBA Senegal, Mr. Fogan Sossah commented: “We must ensure that we have presence in at least 25 countries in the near to medium-term, starting from the UMOA and CEMAC zones.” [Tony Elumelu's take on Africa’s development (ThisDay)]

Rwanda, Tanzania Joint Permanent Commission: update (New Times)

Officials [at the weekend meeting] also reviewed recommendations of the 13th bilateral meeting that took place in 2011 in Tanzania and agreed that, five years on, not much had been done in implementing the recommendations. “We need aim higher in our cooperation in all fields and set up mechanisms for successful operationalization,” said Amb. Jeanine Kambanda, Permanent Secretary at Rwanda’s Ministry of Foreign Affairs and Cooperation. “A lot more will be achieved if we set clear timeframes, ensure progress reporting, and establish effective and efficient monitoring mechanisms, a mandate assigned to the Joint Implementation Committees” she added.

Vince Cable: ‘What Nigeria, Africa can gain from China’ (The Nation)

The evidence also suggests that flows of Chinese capital to Africa go to much the same places as western capital: to large markets (Nigeria, South Africa, Ethiopia) and national resource wealth (Nigeria again, Angola, DRC). They are largely profit driven reflecting the commercial nature of most Chinese state as well as private entities. If there is a difference it is that Chinese investors are more likely to venture into countries where there is judged to be political stability but the rule of law and property rights are weak – DRC, Angola, Zimbabwe – and where standards of governance are generally poor. There is some evidence that Chinese companies struggle however to cope with environments in which robust legal and democratic processes are unexpectedly strong in Africa, as in the fierce defence of land holdings on the line of the China-built railway in Kenya, and this may prove a problem in Nigeria. [The author is immediate past British Secretary of State for Business, Innovation and Skills. Full text of paper delivered at the Africa Today summit in Abuja]

Obama's 'commercial diplomacy' in Africa (Atlantic Council's Africa Center)

This renewed "commercial diplomacy" between the United States and Africa in the Obama administration has coincided with a rise in US investment into Africa. The United States ties France as the largest foreign direct investor into Africa--topping some $31 billion each. Between 2009 and 2013, US goods and service exports to Africa grew 40% and totaled $50.2bn. The United States has a vast bureaucratic apparatus - ranging from the Department of Commerce to the Trade Representative's Office - which can advise African governments on how to make their countries more attractive to American investment. But equally important is encouraging American business, and supporting and better incentivizing them to do business in an increasingly attractive - and profitable - Africa. [Kelsey Lilley is Associate Director of the Atlantic Council's Africa Center and Stephanie Sparrow is an Africa Center intern]

South Africa: foreign policy and economic diplomacy (GCIS)

DIRCO has been central to the coordination of South Africa’s economic diplomacy programme. In anticipation of growth in both the African and Asian regions, we took a conscious decision to expand and strengthen our diplomatic missions in the two regions. We increased our presence on the continent from seven Diplomatic and Consular Missions in 1994 to 47 in 2015. Consequently, South Africa’s trade in the continent increased 39 times from R 11,4bn in 1994 to R 385 billion in 2015. We are targeting half a trillion rand trade with Africa by 2019. As at the end of 2015, 20% of our trade was conducted within the African continent. With additional Economic Diplomacy efforts and enhanced national coordination, South African trade with the world can reach R 2 trillion by the end of this administration. [The author: Minister Maite Nkoana-Mashabane, Minister of International Relations and Cooperation Dept, Budget Vote 2016/17]

Kenya-SA decisions on free movement of travellers (GCIS)

Hon. Nkaissery and Hon. Gigaba held talks on bilateral, regional and multilateral issues of mutual interest, including updating each other on the various respective initiatives being undertaken to fight trans-national crimes such as terrorism, drug-trafficking, illegal arms, money-laundering and illegal migration. These are issues that continue to be constraints on implementing free movement of travellers. The Ministers agreed [inter alia] on the following: issuing of three-year multiple entry visa for frequent travellers; 10 year multiple entry visa for frequent business travellers and academics.

Kenya: Economic Survey 2016 (KNBS)

Kenya’s economy expanded by 5.6% in 2015 compared to 5.3% growth in 2014. In absolute terms, the country’s Gross Domestic Product at current market prices stood at KSh 6.2 trillion in 2015. This growth was mainly supported by a stable macroeconomic environment and significantly improved performance of agriculture, construction, finance and insurance and real estate sectors. However, accommodation and food services remained largely subdued and contracted by 1.3% in 2015 which was a less severe performance compared to a decline of 16.7% in 2014. The ratio of current account balance to GDP improved notably from 11% in 2014 to 7.6% in 2015 largely due to a decline in the import bill against a substantial growth in export earnings. The decrease in the import bill was mainly due to the fall in the international oil prices.

Rwanda: Govt lays out strategy to promote Made-in-Rwanda (New Times)

One of the strategies to reduce the trade deficit gap is to promote production and consumption of locally made products. To identify priority sectors that can quickly contribute to Rwanda’s domestic market recapturing, the ministry conducted a study on “Domestic Market Recapturing Strategy (DMRS)” that was validated in February last year. The study indicated that the total foreign exchange savings induced by the DMRS could reach almost $450m per year. The total potential foreign exchange savings resulting from the DMRS account for 17.8% of the import bill. Almost one third of this would come from the cement sector. This would reduce Rwanda’s average annual import bill by almost 6%. The strategy indicated three key potential sectors to recapture the domestic market.

Tanzania: The devastating cost of tax exemptions (IPPMedia)

According to latest records, tax exemptions rose consistently in the last five years of former president Jakaya Kikwete's government, despite a stated target to lower them to 1 per cent or below of the country’s economic output or gross domestic product (GDP). New data from the Ministry of Finance and Planning seen by The Guardian have revealed the following alarming trend in government tax exemptions. In total, the government granted tax exemptions amounting to a staggering 7.78 trillion/- between 2010 and 2015 alone. [Russia to get foothold on East Africa through Tanzania]

DRC: Mountain of tin draws investors to world's biggest untapped site (Bloomberg)

“We will be the first industrial tin mine in Congo,” said Richard Robinson, managing director of Alphamin Congo, over the hum of helicopter blades. “We will double national output and can be a catalyst for economic development and stability in the whole region.” But the site is incredibly remote: 32kms from the nearest road and 50kms from the closest "airstrip" -- a long section of road where vehicles are stopped when planes land. For the past decade the area has been mined by restive local diggers controlled by armed groups. And in order to sell the tin, the company must prove its supply chain is untainted by the pockets of conflict that continue to destabilize eastern Congo.

Yaoundé-Brazzaville Corridor: update (AfDB)

To link the Congo to Cameroon, the Bank has committed to building the Ketta-Djoum road, with a length of 504.5 kilometres. This road project has a strategic regional character, because it will be one of the main links in the alternative corridor to the Windhoek-Tripoli corridor linking the Central African Republic with Cameroon and Gabon to the south, providing an interconnection with the road linking Brazzaville to Pointe-Noire in the Congo. [RVR's Karim Sadek: 'Laying tracks for regional trade']

CEMAC: Financial system stability assessment (IMF)

The short-term risk of a financial crisis appears low, but the assessment identified pockets of vulnerabilities. The financial sector is not well positioned to contribute effectively to the financing of the CEMAC economies, and it faces an intensification of risk factors related to geopolitical tensions and the fall in commodity prices. Reform progress has been slow in addressing longstanding weaknesses, despite extensive technical assistance, and the urgency for progress is heightened by recent macroeconomic developments. [SA Reserve Bank: Financial stability review]

Two perspectives on African textile sector policy issues: Maria Immanuel, Ron Sandrey: 'The textile and clothing trade in Botswana, Lesotho, Namibia and Swaziland' (tralac), Andrew Brooks: 'East Africa's ban on second-hand clothes won't save its own industry' (The Guardian)

Arancha González: 'Trade, conflict and migration - addressing the displacement crisis through market-driven trade opportunities' (ITC)

Our collaboration with UNHCR is about developing and implementing approaches for sustainable livelihoods in displacement settings. We are currently undergoing a similar exercise with the International Organization for Migration to assist the increasing populations of irregular migrants. We are contributing to addressing the migratory crisis in three main ways.

Global Investment Trends Monitor (UNCTAD)

Investment flows to offshore financial hubs, including offshore financial centres and special purpose entities, were increasingly volatile in 2015, according to the latest UNCTAD Global Investment Trends Monitor. The research shows that these flows, which are excluded from UNCTAD's FDI statistics, declined but remain sizable. The magnitude of quarterly flows through SPEs, in terms of absolute value, rose sharply compared with 2014, reaching the levels last registered in 2012-2013.

African project development network launched (bizcommunity)

Great Green Wall for the Sahara and the Sahel Initiative: update (AU)

India: Speeding export-import clearance – Govt to set up panel for WTO trade pact implementation (Financial Express)


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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 350 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome.

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